Rsync Through ssh Connection Time Out

We have been using rsync with ssh for a long time now with sshd_config having default values. We never experience any "time out" problems until now.

We use rsync command to transfer files from serverA to serverB to update the program library of the server. When we have up to 4-5 programs in our input file we do not face any problem. But if we want to send more than that it just sends the first 4-5 programs and then it stuck and finally displays the messages below:
ssh: connect to host rea port 22: Connection timed out
rsync: connection unexpectedly closed (0 bytes read so far)
rsync error: error in rsync protocol data stream (code 12)

We tried the timeout option set to 30 then 60 but no luck

finally we tried with rsh loggin instead and it works fine.

Looks like sshd is droping the connection.
Can anybody suggest what values we need to check in order to keep this connection alive.

I tried to use the rsync_debug script but it fails on strace command syntax.

I then tried on my test server rsync and monitor with strace and there is no output at all.
I don't even know what this strace command is supposed to show me. In any case I didn't think I will have to dig in that much.

Because this is a live system i'm trying to identify the problem by cutting down on possible causes.
So far I can think of 2 candidates.
sshd deamon
network settings like ethrnet card settings and swich no firewall.

So I tried to eliminate sshd first

I tried rsync through rsh (rlogin) and it works just fine. So it has to be something with ssh

Do you have software firewalls on each system? Have you implemented a software upgrade? Is automatic updates set for Microsoft machines? Get back to basics and check what has changed since the last time it worked.